AFPM ’24: INSIGHT: UN global plastics treaty a ‘historic opportunity’ for chemical industry

SAN ANTONIO (ICIS)–The UN global plastics treaty has the potential to be a watershed moment for the chemical industry, changing the way waste is managed and valued, and catalyzing investment in ecosystems to foster greater circularity.

This was the key theme at the International Petrochemical Conference (IPC) hosted by the American Fuel & Petrochemical Manufacturers (AFPM).

With negotiations and work to take place through 2024, the UN is set to approve a legally binding agreement in early 2025 for 175 nations to curb plastic pollution – an end goal the AFPM supports wholeheartedly.

Three key pillars the industry deems critical to addressing plastic waste are waste management, recycling and financing.

FOCUS ON WASTE MANAGEMENT

“These negotiations present a historic opportunity to improve outcomes and effectively address mismanaged plastic. First, we must improve our waste collection and management systems. 3 billion people around the world lack access to even the most basic waste management,” said Chet Thompson, CEO of the AFPM.

“This has to change. If we’re going to solve this problem, we need to create waste management systems that are accountable – where we can track where the money’s going – and that actually work for the regions they serve,” he added.

“This is the problem we need to solve. There has to be basic waste management infrastructure in place. And then you move to more circular solutions,” said Kerri Reyer, director of Plastics Life Cycle at ExxonMobil, recalling a trip to villages in Indonesia lacking such systems.

CLARITY ON RECYCLING

Recycling must be a key part of the solution, with acceptance and clarity for mechanical and especially chemical (or advanced) recycling.

By being technology neutral, each waste stream can be matched with the most effective recycling technology to ultimately offer customers a wider range of circular products, said the CEO of a global plastics producer.

The most effective way to end pollution is to increase circularity, he said.

The US plastics recycling rate is just 9% – a level the AFPM’s Thomson calls “unacceptably low” for a country with its capabilities and resources. This compares to around 40% in the EU.

A UN global plastics treaty with clarity on the issue could “supercharge” investment in plastics recycling, said Rob Benedict, AFPM vice president of Petrochemicals and Midstream.

Clearly there is massive investment required to develop waste management systems – a figure in the trillions of dollars according to one executive – as well as recycling infrastructure and capacities. Who will pay for this is the tricky part.

EPR AS A FINANCING MECHANISM

Extended Producer Responsibility (EPR) systems as well as mandates on recycling content can be essential components in financing.

EPR is an important tool to fund the build-out of recycling infrastructure and boost recycling rates, said the industry CEO, pointing to Europe’s high recycling rate because of effective EPR systems.

EPR is a policy approach where producers take responsibility in managing their products at the end of their useful life. The responsibility can be financial or operational, or a combination of both.

The AFPM has not specifically endorsed EPR, but is exploring this approach through the UN negotiations.

“If people are going down the route of EPR, there are certain parameters we would want to see such as ringfencing the money so that it goes towards waste management and is not used for everything,” said Rob Benedict, AFPM vice president of Petrochemicals and Midstream.

And in terms of creating value for the waste, “the easiest, most effective way to do that is to have recycled content mandates… That is a very significant policy enabler the treaty must embrace,” said Tracey Campbell, EVP of sustainability and corporate affairs at LyondellBasell.

“As an industry, we cannot collect enough plastic waste to meet customer demand for recycled content. The market is there, so we have to be able to stand up the infrastructure to enable the market to work,” said Greg Skelton, head of Americas government relations at SABIC.

GLOBAL FEEDSTOCK ECOSYSTEM BUILT ON TRADE

And thus comes the issue of trade, involving the movement of plastic waste, will be a key component to boosting circularity and reducing waste.

Language in the current UN ‘zero draft’ is punitive to trade, and the Basel Convention put restrictions on the movement of plastic waste, Skelton pointed out.

“If you think about difficult to recycle materials from non-producing nations or underdeveloped nations, and even in developed nations, we need cross-border appreciation of the materials that need to move back and forth,” said Campbell from LyondellBasell.

Liquid crackers that can process feedstock from hard-to-recycle plastic waste are not located everywhere, she added.

NARROWING SCOPE IS KEY

Narrowing the scope of the negotiations solely to ending plastic pollution rather than changing existing regulatory programs is what the industry seeks.

“So far, too much of the discussion has been centered around curbing production and the use of plastics,” said the AFPM’s Thompson.

“Plastic has no place in the environment and we are doing something about it. However, some negotiators have mistaken plastic itself as the problem and are advocating to cap plastic production,” said Karen McKee, president of ExxonMobil Product Solutions and the recipient of the Petrochemical Heritage Award at the IPC.

“All the negotiators need to remember that the nations of the world are counting on them to remember sound science as they work on a global plastics treaty,” she added.

Production caps and bans would mostly hurt middle class consumers and underserved communities by making essential products more expensive, an industry CEO argued.

“Everybody that comes to the table is here for the same reason – we want to end plastic pollution. But we sometimes get lost in the weeds about the things we can’t agree on… If we can narrow that scope… we can actually have a global framework that works,” said LyondellBasell’s Campbell.

To paraphrase an industry CEO, we are facing a multi-generational challenge to address plastic pollution. And the chemical industry is uniquely positioned to make a meaningful difference.

Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 24-26 March in San Antonio, Texas.